Suit against KC-area Bitcoin company survives motion to dismiss

A federal judge denied a motion by Butterfly Labs to have a case against the Leawood, Kan.-based Bitcoin mining company dismissed.

The Federal Trade Commission filed a suit in September alleging that Butterfly Labs, which makes hardware designed to help customers mine Bitcoins, was defrauding customers.

The FTC claimed Butterfly Labs charged customers for machines and then took several months to deliver them. Butterfly Labs’ attorneys countered that the case should be dismissed because the company had not made materially false or misleading representations, but that motion was denied.